Why the Price Elasticity of Demand Can Change
The price elasticity of demand of a commodity can change as a result of various factors. In this case, the factors that have been revealed to affect the price elasticity of demand of a product include the price of other related commodities, future expectations, change in tastes and preferences among others. It has been observed that, if demand decreased proportionally to an increase in supply along an elastic and inelastic curve, demand and supply analysis can be used to compare the impact on price, quantity, and total revenue. In the diagram below, the impact of a shift in demand along an elastic supply curve is demonstrated. As it can be observed, the supply is perfectly elastic and the shifts in the demand level can be highly influenced by the changes in price, income level, and the quantity supplied.
On the other hand, where supply is perfectly inelastic, the shifts in demand seem to be not affected by the quantity supplied since the changes in price and income do not impact the quantity supplied. This can be seen in the graph below where the changes in prices and income levels do not impact the quantity supplied. As it can be seen the shifts in the supply curve are not caused by the changes in supply as the level of supply is constant and not affected by the changes in prices and income levels.